No, this isn’t just a male-only world of finance.
According to a 2020 McKinsey report, significant wealth is expected to transfer to women because they generally live longer than men. By 2030, American women could control much of the $30 trillion in wealth held by baby boomers.
However, misconceptions about women still persist. Financial acumen, even though more people are managing They are single, divorced, or widowed and have no money in their household budget.
So let’s expose 5 mistakes Long-standing myths about women and money.
Myth 1: Women are more likely to be spendthrifts.
When will the stereotype of women as shoe shopping addicts end?
Of course, spending situations are different, but women are no more likely to overspend.
A LendingTree analysis of federal data found that single men spend more than single women, on average between $41,203 and $38,838 a year. The findings, based on the Bureau of Labor Statistics’ 2021 Consumer Expenditure Survey, also showed:
- Men spend more on food: $4,816 per year while for women it’s $4,446.
- Men outnumbered women by a 2-to-1 margin, spending $542 on alcohol each year compared to $257 for women.
- Indeed, women spend more on clothing, spending $671 a year on apparel and services compared to $398 for men.
- Men spend more than women on “other” entertainment, such as indoor exercise equipment and athletic shoes. They spent an average of $675, compared to $141 for women.
Myth 2: Women are bad at salary negotiation.
Employed men earn more than women As with any wage level, wage inequality widens as you move up the spectrum.as report According to the Bureau of Labor Statistics, women in full-time wage and salary roles earned on average 83% of men in 2021.it is $998 vs. $912 per week.
One reason for the wage gap is often that women are unable to negotiate for higher pay. But it’s not just women who are too scared to ask for money.
When asked about their recent employment, “most non-self-employed U.S. workers say they did not ask for a higher salary than they were originally offered,” according to the Pew Research Center. investigation.
In fact, Pew found that 60% of employees accepted the first offer.
Among those who requested higher pay, men were only slightly more likely to do so, at 32 percent and 28 percent. And because women start worse than men in the pay department, even if women ask for more money, there will still be a pay gap.
Researchers at the University of Southern California found similar results when they used virtual agents to test how participants negotiated software engineering jobs.
Regardless of gender, 43% of participants accepted what was offered.
“People are generally bad at negotiating,” one of the researchers said in the report. research result.
Myth 3: Women are not as good investors as men.
Investing involves risk. It’s true that women tend to be more risk-averse than men when it comes to investing, but that works to their advantage.
According to a 2021 Fidelity Investments report, they lead men by a small margin when it comes to investment returns.
Part of the reason is that women don’t trade as often as men.
An analysis of more than 5 million Fidelity Investments accounts from 2011 to 2020 found that, on average, women outperformed men’s accounts by 40 basis points (0.4%).
Over time, those small differences can add up to a lot of money.
Myth 4: Women are more afraid of the stock market than men.
According to Fidelity, more than half (51%) of women who invest in stocks say they typically stay invested even if markets decline, compared to 43% of men.
By the way, women are increasingly investing in stocks. — This includes non-work 401(k) plans.
A study by Fidelity found that 67% of women currently invest outside of retirement accounts. This was a significant increase from her 44% fidelity recorded in 2018.
Myth 5: Women are too emotional to make good money managers.
More than half (52%) of U.S. adults say they feel stressed about money, worry about it, get sleep deprived, or feel depressed due to financial worries, according to a survey report. Some respondents answered that they do so. 2023 survey By Bankrate.com. This was up from 42% the previous year. It’s understandable that people are stressed about money during the pandemic and after inflation hit a 40-year high in 2022 and interest rates on mortgages, car loans and credit cards skyrocketed.
Bankrate said women are more worried than men. 46% of women said financial anxiety was having a negative impact on their mental health, compared to 38% of men.
None of this means you aren’t financially smart.
A Fidelity study found that stress is the number one emotion women feel when it comes to money, but nearly 90% are taking steps to take control of their finances. They are adjusting their spending habits, increasing their savings, and improving their credit scores.
And when women don’t know what to do, they’re more likely to ask for help.
Fidelity has seen a 19% increase in women seeking financial guidance since 2019, compared to a 16% increase in men.
I always say this to women. Even if men dominate the currency we use, don’t underestimate your ability to handle your own money.
